# In the matter of State Bank of India vs. Abhijeet Ferrotech Limited

> NCLAT judgment dated 2024-07-02. Citation: TCN-2024-NCLAT-00360. The State Bank of India (SBI) filed an appeal challenging the order dated 21.03.2023 passed…

- **Court:** NCLAT
- **Order date:** 2 Jul 2024
- **Citation:** TCN-2024-NCLAT-00360
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-abhijeet-ferrotech-limited-f955eb11

## Summary

### Background

The State Bank of India (SBI) filed an appeal challenging the order dated 21.03.2023 passed by the National Company Law Tribunal (NCLT), Cuttack Bench, which rejected SBI's Section 7 application to initiate Corporate Insolvency Resolution Process (CIRP) against Abhijeet Ferrotech Ltd., the Corporate Debtor. The NCLT rejected the application, questioning whether the proceeding was barred due to an earlier order by DRT-II, Kolkata, in T.A. No.179 of 2020 dated 17.06.2022. The NCLT ruled against SBI, stating the matter was substantially the same as an appeal pending before the DRAT and declined to invoke its discretion.

## Facts

The State Bank of Travancore sanctioned a loan of Rs.99 crores to Abhijeet Ferrotech Limited on 17.03.2012. The working capital limit of Rs.99 crores was renewed on 08.04.2013. The Corporate Debtor's accounts were declared Non-Performing Assets (NPA) on 31.03.2013. SBI and other lenders entered into a Master Restructuring Agreement on 28.09.2013. The State Bank of Travancore restructured credit facilities on 14.02.2014, sanctioning Rs.89,46,00,000/-. A Deed of Accession and Modification on Master Restructuring Agreement was executed on 26.03.2014. The State Bank of Travancore sanctioned an additional limit of Rs.36,74,00,000/- on 23.12.2015 and Rs.1,26,20,00,000/- on 28.12.2015. The loan account slipped into NPA category on 30.09.2016. SBI initiated SARFAESI Act

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## Issues and analysis

### Issue 1: Whether the proceeding of this petition is barred in view of the order passed by DRT-II, Kolkata in …

**Ratio:** Section 238 of the IBC provides an overriding effect over other laws, including the CPC

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**Reasoning:** The NCLAT reasoned that the DRT proceedings are for the recovery of debt, while Section 7

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**Interpretation:** The interpretation of Section 238 of the IBC is that it is designed to ensure

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**Application:** The NCLAT applied the principle that the DRT order and the pending Section 19

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** State Bank of…
- **Respondents:** Abhijeet Ferrotech…; ABHIJEET FERROTECH…
- **Advocates:** Abhijeet…; HARSHIT…; +7 more

## Timeline

- **2012-03-17 — Loan Sanc…**: State Bank of Travancore sanctioned a loan…
- **2013-04-08 — Working Capita…**: Working capital limit of Rs.99 crores was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19 — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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